Global Pensions Wrap: February edition

BlackRock hit by backlash in France

 FTfm: Activists protesting France’s state pension reforms have turned their wrath on US fund manager BlackRock, storming the group’s Paris headquarters brandishing flares. Campaigners have seen the world’s largest asset manager as having an undue influence on government policy, and have characterised the sweeping reforms as playing to corporate interests, while ordinary workers are forced to work later in life. In the UK, BlackRock’s London office was targeted by Extinction Rebellion protestors in 2019.

NY Common fund puts 27 coal companies under microscope

 Fundfire: The New York State Common Retirement fund is considering the future of its coal holdings, with options on the table including divestment. The $211bn (£161bn) plan is deliberating over investments in 27 companies worth around $98m, according to Reuters. Comptroller Thomas DiNapoli has asked companies that generate at least 10 per cent of their revenue through thermal coal to disclose how much they are spending on transitioning from using coal to produce electricity, and how much revenue they realise from low-emission technologies, among other factors.

Australian senator slams super funds for ‘complacency and inertia’

 Ignites Asia: Superannuation funds must improve the value they provide to consumers or merge with competitors, an Australian senator has warned. Jane Hume, the assistant minister for superannuation, accused the sector of “complacency and inertia” in raising administration charges despite unsatisfactory outcomes. The Australian Prudential Regulation Authority recently produced a heat map, comparing supers on investment returns, costs and sustainability of outcomes. Ms Hume, who previously worked for giant provider AustralianSuper, said this research leaves poor performers with nowhere to hide, and said they should “be looking to exit or join a different team”.

Investors advised against knee-jerk reactions to coronavirus

 MandateWire: Investors faced with plunging equity holdings in the aftermath of China’s coronavirus outbreak may be well advised to buy the dip, according to fund managers. The outbreak has wiped billions off the value of European stocks as traders fear a repeat of the 2003 Sars outbreak. However, Mark Dowding, Bluebay Asset Management’s chief investment officer, points out that this epidemic coincided with the UK and US invasion of Iraq, so it is difficult to say whether it is solely responsible for market moves. Even if a correction of between 5 and 10 per cent occurs, the disease will not necessarily have a marked impact on fundamentals, according to Kingswood CIO Rupert Thompson, who says the volatility may provide opportunities to increase holdings.

Pension board sues own investment committee to halt pay rise

  Fundfire: Trustees of a Detroit emergency services pension fund are taking their own investment committee to court after it approved a 75 per cent pay rise for the fund’s deputy chief investment officer. Kevin Kenneally, who resigned from the Police and Fire Retirement System of the City of Detroit in December, only to return as a contractor with less duties, has seen his annual salary climb to $224,000 from $162,781, and a signing bonus of $60,000. The investment committee has also approved two pay rises for chief investment officer Ryan Bigelow since December 2018, boosting his annual pay to $315,000 from $242,000, according to a board statement issued on Tuesday, which also suggested the committee has threatened to delay investment decisions until the increases are granted.